CHAN KAM HONG v. MOHAMMAD RIAZ

HCPI 938/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 938 OF 2005

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J U D G M E N T

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Introduction

1. The 46-year-old Mr. Chan, the sole proprietor of a car repair and maintenance business called Shun Yong Motor Cars Co. (“Shun Yong”), was injured in a head on collision on 16 June 2004 when driving his vehicle.  Mr. Chan said that during the collision he sprained his right waist and his right knee hit some hard object.

2. Shortly after the collision, he started to feel pain at his right waist, and the pain further radiated to the right hip.  He also felt pain on the right knee.  He was sent to the government hospital, and was discharged on the same day with analgesics.

3. Mr. Chan instituted proceedings against the driver of the offending vehicle of the traffic accident.  Interlocutory judgment was already entered and I am asked to assess damages Mr. Chan claims.

Injuries and Treatment

4. After his discharge from the government hospital, Mr. Chan said that he felt sharp pain at his waist and right leg.  The next day, he went to consult a private orthopedic, Dr. Lam.  He was admitted to St. Teresa Hospital for 2 days and x-ray was taken. Mr. Chan’s right knee and right foot showed no injury.  The X-ray and the MRI of the lumbar spine however showed degeneration at the L2/3, L3/4 and L4/5 levels, and in particular at L3/4 level.  Mr. Chan was given physiotherapy and anti-inflammatory drugs.

5. Mr. Chan continued to receive physiotherapy treatment for his back pain at Dr. Lam’s clinic.  Thereafter, Mr. Chan received physiotherapy treatments both from private practitioner as well as from Caritas Medical Centre between February to June 2005.  He was also referred by the government doctor to receive some occupational therapy in the government hospital in October 2005.

6. In addition to these treatments, Mr. Chan has also sought traditional treatment from Chinese bonesetter and chiropractic therapist.  Mr. Chan said that in spite of these various treatments, he still has residual symptoms of radiating pain at his lower back around the waist, numbness at his right knee and difficulty in urination.  He claims that he is not able to squat or sit for a long time and easily loses his balance when his right knee gives away suddenly.  He also finds it difficult to walk the stairs.

Issues

7. It is not in issue that Mr. Chan had a pre-existing condition of a degenerative lumbar spine before the accident.  Mr. Chan however claims that the pre-existing condition was asymptomatic.

8. There are three main contentions in this assessment hearing.  The first is whether Mr. Chan’s residual pain is caused or contributed by Mr. Chan’s admitted degeneration of his lumbar spine.  The second is whether Mr. Chan has exaggerated his disability.  The third is that, whether there should be a discount to take account of Mr. Chan’s pre-existing condition if the pre-existing condition was found to have caused or contributed to Mr. Chan’s disability.

9. Arising from these main issues are two sub-issues concerning the claim for loss of earnings.  The first sub-issue is whether Mr. Chan is able to return to his pre-accident occupation and secondly, whether the loss of profit of Shun Yong after the accident was caused by Mr. Chan’s disability.

Evidence

10. Mr. Chan gave evidence and was vigorously cross-examined by the Defendant’s counsel, Mr. Lim.  During the two days’ testimony on 2 November 2007 and 15 November 2007, I observe that Mr. Chan appeared to be sitting uncomfortably and shifting his sitting position every now and then.  He had also placed his right hand at the back near his waist region during the trial. 

11. According to Mr. Chan, the pain had prevented him from carrying out more strenuous car-repair work or work that requires him to bend or squat, such as spraying paint and assembling car parts, which task he had previously performed by himself.  After the accident, he hired his younger brother to work for him on a causal basis and contracted out the paint spraying work.

12. It is not disputed that prior to the accident, Mr. Chan in 1995 was admitted to Baptist Hospital for some treatment.  During cross-examination, Mr. Chan denied that the admission in 1995 was related to any back injury.  He said he was admitted for a nosebleed and a minor external wound (皮外傷).  He said he has since fully recovered from the injury in 1995 and there was no problem with his back until after the accident.

13. The Defendant’s solicitors had engaged Take Result Limited to conduct surveillance on Mr. Chan for the purpose of litigation in November 2005 on the 3rd, 4th, 10th, 18th, 19th, 21st, 23rd and 25th.

14. In the surveillance tape played in court, Mr. Chan was seen walking along streets in Central during his visit to the joint orthopedic expert, Dr. Lee Po Chin, getting in and out of the MTR station, and going about his business in the vicinity of his garage.  Apart from one or two occasions when he was seen walking with a slight limp, Mr. Chan appeared to be able to walk normally most of the time, including going down the stairs at a MTR station.

15. Furthermore, in a recording on 18 November 2005, Mr. Chan was seen squat down on the top of his garage for about 30 minutes to fix a TV aerial.  According to the evidence of the surveillance agent, Mr. Chan climbed up the rooftop of the garage by using a ladder.  

16. When cross-examined on the surveillance tape, Mr. Chan said that on the day of 3 November 2005 when he attended Dr. Lee’s clinic in Central, he still had pain around his back and weakness on his right knee.  He was emphatic that the surveillance tape had indeed showed that he needed to support his waist with his hand to as he walked.

17. Regarding the incident on the roof on 18 November 2005, Mr. Chan explained that he went to the roof after he came back from a treatment to a Chinese bone-setter (跌打).  Hence, Mr. Chan said that his pain was slightly relieved.  He denied having exaggerated his pain.

Discussion

(1) Has Mr. Chan’s pre-existing condition caused or aggravated his disability?

18. The medical reports in relation to the 1995 injury and the accident are admitted into evidence without any oral evidence.  The joint orthopedic expert, Dr. Lee examined Mr. Chan on 3 November 2005, and wrote three reports dated 15 December 2005, 2 September 2006 and 6 January 2007 for the purpose of litigation.

19. Regarding the 1995 injury, there are the report of Dr. Yeung To Ling, the treating doctor, dated 30 March 2006 and the radiology report dated 16 January 1995.  According to these reports, Mr. Chan was admitted into Baptist Hospital on 14 January 1995 for two days for evaluation of pain of lumbar spine after an injury on 7 January 1995.  The X-ray of Mr. Chan’s lumbar spine showed marked degenerative changes at the L3-L4. Mr. Chan was diagnosed of suffering (apart from a diagnosis unrelated to the back) from osteoarthritis of lumbar spine and back sprain. He was prescribed analgesic and bed rest.

20. Mr. Chan said that the 1995 injury was only a minor external wound, and unrelated to a back injury.  Mr. Chan however was extremely vague about the 1995 injury.  Whilst he had stated in his witness statement that the hospital admission in 1995 was due to a nosebleed and some pain around his waist, he testified however during cross-examination that it was due to a minor external injury.  Mr. Chan however gave no information as how he was injured.

21. When Dr. Lee examined Mr. Chan one and half years after the accident in November 2005, he noted from the X-ray taken of Mr. Chan’s lumbar spine that he was suffering from “very marked degenerative change in the L3/4 with narrowing of the disc space, marked osteophyte formation and subchrondral sclerosis. … X-ray of the right knee showed mild osteoarthritis changes.”  After he had compared the x-ray records done one day after the accident at St. Teresa Hospital, Dr. Lee states in his first report that Mr. Chan already suffered from degenerative changes for a long time before the accident and those “several degenerative changes made Mr. Chan more prone to develop back pain” (see p.9 of Dr. Lee’s first report). Dr. Lee further opines that there was nothing in Mr. Chan’s right knee to account for the significant pain he complained of.

22. Subsequent to his first report, Dr. Lee was asked to consider the reports of the 1995 injury and the report of Dr. Chak of Tuen Mun Hospital.  According to Dr. Chak’s report, Mr. Chan attended the government hospital on 31 December 2004 because of his complaint of back pain and right knee pain.  In the report, Dr. Chak stated that the x-ray taken of Mr. Chan’s lumbar spine shows degenerative changes at his lumbar spine and right knee.

23. After he had considered the reports, Dr. Lee maintained his view in his subsequent reports that Mr. Chan had suffered degenerative changes at L3 before the accident and opined that Mr. Chan’s severe degenerative changes may have triggered the injury (See Dr. Lee’s first report, p.9 and the second report, p. 5). 

24. Based on the above medical evidence, I find that Mr. Chan had severe degenerative changes in his lumbar spine in 1995.  I further believe that it was probably due to some back problems that caused Mr. Chan to seek medical treatment in 1995.  Mr. Yeung wrote the report of the 1995 treatment in 2006, he however had not mentioned whether Mr. Chan’s back pain had been satisfactorily managed.  When Mr. Chan met the accident in 2004, the X-ray shows that the extent of the degeneration at the lumbar spine has increased.  It is not just confined to the L3/4 area, but further extends to the L2/3 as well as the L4/5 levels.  This leads me to infer that Mr. Chan had probably suffered some back pain before the accident.

25. Further, I am far from impressed with Mr. Chan’s testimony in relation to the 1995 injury.  I form an impression that Mr. Chan has tried to conceal the true nature of the 1995 injury.  The medical report of Dr. Yeung and the report by the radiologist clearly show that Mr. Chan had been suffering from a back injury in respect of an injury having taken place a week before his admission.  Although the reports also show that Mr. Chan suffered from stuffy nose and cough, Dr. Yeung had only prescribed analgesics for pain and bed rest to treat his back.  Hence, I do not accept Mr. Chan’s evidence and I find that the 1995 injury was mainly related to a back injury.  In view of the above, I further infer that the 1995 back injury would have likely been more serious as Mr. Chan had told me.

26. On the medical evidence, and in particular on the opinion of Dr. Lee, I find that Mr. Chan’s residual pain is not solely caused by the accident, but has been contributed by his pre-existing condition.

(2) Has Mr. Chan exaggerated the residual symptoms?

27. I find he has.

28. According to Dr. Lee, the normal recovery time of Mr. Chan’s injury is 12 months.  The surveillance tape – which was taken 18 months since the accident - in my view, has overwhelmingly undermined Mr. Chan’s credibility.  From the tape, it is shown that, apart from some slight physical restriction, Mr. Chan was found to have been able to go about his daily routines (including climbing up a ladder to adjust a television antenna in a position that required him to squat or sit down for more than 30 minutes) 18 months after the accident.

29. Further according to the physiotherapy report dated 17 August 2005 from Caritas Medical Centre, Mr. Chan had received 13 sessions of physiotherapy treatment between February to June 2005.  When he was discharged from physiotherapy, Mr. Chan’s lumbar movement was found to be satisfactory, and he had a full score on the straight leg raise test.  There was also no neurological deficit or significant back muscle spasm having been found. Mr. Chan’s knee was assessed to have full range of motion and to be pain free.  His mobility was described to be independent.

30. However, 3 months after his discharge from physiotherapy when Dr. Lee examined Mr. Chan, Dr. Lee reported that Mr. Chan complained to him of low back pain of piercing character with pain radiating to the right knee, which led to occasional feeling of giving away.  Furthermore, at the straight-leg test, his right leg only scored 10° compared to 70° on the left leg because of his reported complaint of back pain.  This test result does not seem to be supported by the satisfactory assessment stated in the Caritas’ physiotherapy report.  Dr. Lee has also expressed skepticism of Mr. Chan’s reported symptoms as he commented in the first report that Mr. Chan had shown “ muscle guarding”.

31. At the hearing, I further noticed that Mr. Chan had to frequently adjust his sitting position, and explained to me apologetically that it was due to his back pain.  Every now and again, he wore an expression of discomfort when he placed his hand at the right side of his waist.  I am however far from impressed by Mr. Chan’s evidence.  I find that it most unconvincing that after two years since the surveillance, Mr. Chan’s pain – given the various treatments he had received – has been intensified to the extent Mr. Chan had tried to lead me to believe.  The pain and discomfort Mr. Chan has demonstrated during the hearing in my observation are contrived.  I find Mr. Chan has grossly exaggerated his symptoms.

32. To conclude, I find that Mr. Chan’s residual pain is confined to his lower back.  I am not satisfied that Mr. Chan has proved that the other complaints such as the weakness on his right knee or the urological problems were related to the 2004 injury as there is no medical evidence to support these other complaints.  The residual back pain is exaggerated.

(3) Whether the damages to be awarded to Mr. Chan should be discounted?

33. Notwithstanding the concession by Counsel for Mr. Chan, Mr. Wong, that Mr. Chan had suffered a pre-existing degenerated L3, Mr. Wong submitted that the Defendant has to take Mr. Chan as he found him, and be responsible for the total consequence arising from the accident.  In support of his submission, Mr. Wong relied on the well-known “thin skull” principle, developed from a body of case-law in tort claims (See Smith v Leech Brain & Co. Ltd. [1962] 405, Robinson v the Post Office and another [1974] 2 All ER 737, Love v Port of London Authority [1959] 541).

34. Mr. Lim contends that the “thin skull” principle is not applicable to a plaintiff with a pre-existing condition, and further argues that I should instead apply the principles elucidated by Deputy Judge Woolley [1](as he then was), and confirmed by the Court of Appeal in Chan Kam Hoi v Dragages Et Travaux Publics [1998] 2HKLRD958, by discounting the damages to be awarded.

35. I have no hesitation in rejecting Mr. Wong’s  ‘thin skull’ argument.  This principle generally imposes liability on a tortfeasor in respect of a victim’s injury or condition developed subsequent to the original injury as a result of a particular condition of the victim such as an unusually thin skull or an unusually weak heart.  In these sorts of cases, the issue is one of causation. 

36. In the present case, the issue is not whether Mr. Chan’s injury or symptoms after the accident were developed subsequent to a further incident as a result of his degenerated lumbar spine.  The issue should be, as discussed above, the extent of contribution by the pre-existing condition to Mr. Chan’s disability.

37. Although I have found that the pre-existing condition has contributed to the disability, it is however very difficult to predict with any precision whether Mr. Chan’s pre-existing degenerative changes would have in any event led to disability.  As Dr. Lee has observed, “persons with severe degeneration of the lumbar spine may eventually develop back pain when left to its natural course, the medical literatures do not provide us with enough information to allow us to predict when such stage will be reached.” (See p.5 of the second report).

38. The postulation of the risk of a pre-existing condition leading to Mr. Chan’s disability, according to the classification in the first instance decision of Chan Kam Hoi (ibid)(at pp.4-5), may possibly fall into three likely scenarios.  The first scenario would likely be that Mr. Chan would have gone through life unaffected by the pre-existing condition.  The second is a strong possibility that some other event, or natural progression of the condition, would have brought about Mr. Chan’s present state.  The third is whether this would certainly have occurred at some stage in any event.

39. Mr. Chan was almost 47 at the date of the accident and 50 at trial. Dr. Lee has stated in the second report that “a person with severe degeneration of the lumbar disc on x-rays had higher chance of developing significant back pain that prevent them doing strenuous manual work at an earlier age, compared to another person of the same age in whom x-ray of the lumbar spine has mild or no degenerative change.”  Nine years before the accident in 1995 when Mr. Chan was only about 37, Mr. Chan’s lumbar spine at the L3 area, according to the 1995 reports was already degenerated.  With this generation, Mr. Chan would therefore have higher chance of developing significant back pain at an earlier age than a man without any degeneration.  Hence it is least likely that Mr. Chan’s situation falls within the first scenario.

40. Mr. Chan’s spinal problem (as the plaintiff in Chan Kam Hoi) is not uncommon.  In view of his age, the nature of his job and the severity of the degeneration, it is highly likely that Mr. Chan, had the accident not occurred, would nonetheless have suffered some back-related disability probably around early to mid 50s.  Hence, I find that Mr. Chan’s condition is more likely to be in the second category (and I am however unable to exclude the likelihood of the third category scenario). 

41. According to Chan Kam Hoi (HCPI 815 of 1999), a finding of the second category would require an assessment of the degree of the possibility in deciding what reduction is appropriate, and in the third, an allowance is to be made for such an appropriate reduction.  The learned Deputy Judge after having found that the plaintiff’s condition was somewhere between the second and third category, and that the plaintiff in that case would have to give up his pre-accident occupation by the time he was 55, discounted damages he had awarded for pain, suffering and loss of amenities and loss of earnings globally by 45 %[2].  The Court of Appeal has confirmed this approach of global percentage discount. 

42. In this case, Dr. Lee concludes that Mr. Chan’s present physical limitation is a result of the combination of the pre-existing condition and the injury from the 2004 accident, and that there is presently no scientifically sound method to identify the relative contribution of either factor (See Dr. Lee’s second report, p.6).  Applying the principle in Chan Kam Hoi (HCPI 815 of 1999), I accept that the Defendant in the circumstances should not be responsible for what Mr. Chan would have suffered from his pre-existing condition had the accident not happened as it did, and that there should be some discount in the damages to reflect this.  As to the amount to be discounted, Mr. Lim invites me to similarly adopt a global discount of at least 30%.

43. Mr. Chan is a proprietor of his own business in car repair and maintenance.  After the accident, he continued to operate the business (though allegedly with reduced profits).  The medical evidence as to when Mr. Chan’s pre-existing condition would have suffered deterioration in any event is highly uncertain.  In this case, the evidence is less certain than in Chan Kam Hoi (ibid) as to when the disability would have caused Mr. Chan to give up his pre-accident occupation altogether.  I consider the discount should be smaller than the one adopted in Chan Kam Hoi (ibid), and come to a view that a discount of 25% is appropriate.

Heads of Damages

(1) Pain, Suffering and Loss of Amenities (“PSLA”)

44. Mr.Wong submits that the injuries should fall within the bracket of “serious” injury category, and seek an award of $300,000, relying on cases of Tsang Tai Fat v Kinglan Concret Drilling Co. Ltd, (unrep.) HCPI 566 of 2001(Suffiad, J, 6 August 2003); Ashok GC v Kam Kee Construction Works Ltd. & Ano., (unrep) HCPI 691 of 2004, (Master Hui, 23 January 2007) [3]and Chan Kam Hoi (CA, ibid).

45. Mr. Lim contends that the injuries should only attract an award of no more than $120,000, referring to Lam Chiu v Poon Tat Hing (unrep.) DCPI 203 of 2001 (Master Yu, 11 April 2002); Ng Yu Fu v Wong Shek Ning (unrep), HCPI 252 of 2004 (Master J. Wong, 21 February 2006); Chung Kam Chuen v Lisboa Bakeries Ltd. (unrep) HCPI 1270 of 2003 (Deputy High Court Judge Carlson, 24 March 2005); Ahmed Masood v Chung Kau Engineering Cp. Ltd (unrep.) DCPI No. 517 of 2003 and Tam Kwok Man v KMB (unrep), HCPI 755 of 2001 ( Beeson J., 11 July 2003).

46. I note in the hearing bundle a bundle of sick leave certificates granted to Mr. Chan by Dr. Lam for about 6 months since the accident. Mr. Chan had also required physiotherapy for about 12 months.  After having considered the above authorities, I consider that the appropriate award for Mr. Chan’s disabilities should attract an award of $200,000.  After discounted by 25% to reflect the pre-existing condition, I award $150,000.

(2) Loss of Earnings

47. There are two main contentions in respect of Mr. Chan’s claim for loss of earnings.  First is whether Mr. Chan is able to resume his pre-accident occupation as a car mechanic.  Secondly, whether the loss of profits Mr. Chan suffers after the accident was caused by his injuries.

(A) Is Mr. Chan able to return to his pre-accident occupation?

48. To be more precise, the issue in my view is not really whether Mr. Chan is able to return to his pre-accident occupation as he has continued to operate Shun Yong after the accident.  His real complaint is that he has not been able to do more strenuous task because of his residual symptoms.  As a result, he had to engage his mechanic brother to work for him casually and contract out paint-spraying work. 

49. To support this claim, Mr. Chan called a paint-spraying technician of Wai Lun Motors Co., to which Mr. Chan sub-contracted most of the work, to give evidence.  According to this witness, paint spraying is very strenuous work as it requires a worker to not only carry a heavy bucket filled with paint, but also to move up and down during the spraying.

50. Mr. Lim contended that Mr. Chan had told Dr. Lee during the medical examination that he had, before the accident, employed two workers.  He further pointed out that according to Shun Yong’s Profit and Loss account for the year 2003/04, there was an item of expenditure described as MPF contribution in the sum of $12,000. Mr. Lim suggested that this expenditure would have most likely been in respect of a MPF contribution   Mr. Chan had paid for his employee.  Mr. Chan however denied of having employed anyone before the accident, and said that the MPF contribution was probably a mistake his accountant had made when preparing the business account.

51. Mr. Lim further took issue with Mr. Chan’s given reason for sub-contracting paint-spraying work.  Mr. Lim contended that the reason was more likely due to the relocation of Shun Yong to another shop premises, which did not have sufficient space for the work to be done there.  Mr. Chan denied this suggestion and said that spraying could also be done in the new shop premises.

52. Mr. Chan is a self-employed person, operating a one-man business of repairing vehicles and other related services.  After the accident, he has continued to operate the business and still managed to earn a profit, though with reduction.  Dr. Lee in his first report has also confirmed that the residual pain would not have prevented him from running the business.  Thus, it is beyond question that Mr. Chan could continue operate his business.

53. Although Mr. Chan is able to carry out with his business, I however note that Dr. Lee had commented that Mr. Chan’s back condition could have potentially restricted his ability in lifting heavy objects.  Hence, I accept that Mr. Chan’s condition has made it more difficult for him to carry out more physically demanding tasks, which he had previously been able to do.  In relation to the first sub-issue, I therefore find that Mr. Chan is able to continue with his pre-accident business, but with reduced efficiency.

(B) Whether the loss of profit after the accident was caused by the accident?

54. Mr. Chan claims that after the accident, Shun Yong’s Profit and Loss accounts for the accounting years between 2003 and 2007 as shown in the table below, show that its profit has dropped as a result of the extra labour and sub-contracting costs since the accident.

55. Mr. Lim however contended that Mr. Chan has failed to prove that the drop in profits was due to the accident.  Mr. Lim said that Shun Yong’s loss of profit was likely due to other reasons unconnected with the accident.  Mr. Lim gave three reasons.

56. First, the relocation of the business premises.  Mr. Chan had previously operated Shun Yong at Po On Road.  In November 2005, Mr. Chan moved his business to Shun Ning Road as the original shop premises was no longer available for letting due to some government re-development plan.  Mr. Chan was cross-examined on whether Shun Yong’s business has been affected after having moved to new premises.  Mr. Chan denied having any adverse effect on his business.

57. Second, the sharp increase of the price of material and parts after the accident.  Mr. Lim argued that the Profit and Loss accounts for the two years before the accident showed that the percentage of the cost of materials to the amount of the business receipts was only 16.6% and 18.4%.  However, after the accident, it has increased to 36% for the year 2004/05 and further increased to over 43% for the two subsequent years of 2005/06 and 2006/07.  Mr. Chan agreed that the costs of the materials had escalated since the accident but did not accept that they had reduced profit.

58. Third, Shun Yong’s profit and loss accounts were not audited.  Hence, Mr. Lim contended that Mr. Chan had failed to adduce any satisfactory evidence to prove any post-accident loss of profit of his business.

Discussion

59. Mr. Lim’s first contention in relation to the relocation, in my view, is unsupported by any evidence.  Contrary to Mr. Lim’s contention that the new shop premise has affected the business, I find instead that the business receipts after the accident have gone up rather than down.  I do not accept that the relocation of the shop has adversely affected Mr. Chan’s business. 

60. It is not in dispute that since the accident the costs of materials have increased.  The more expensive material costs would have increased the costs of operation, and it follows that they would have eaten into Shun Yung’s profits.  Thus, I agree with Mr. Lim that an increase in the cost of materials could have been a reason for causing a decline in profit.

61. Regarding Shun Yong’s accounts, I do not agree with Mr. Lim’s suggestion that just because the accounts were not audited, Mr. Chan would not be able to rely on them to prove his losses of profits.  I note that the Notice of the Assessment of Profit Tax for years 2002/03 and 2003/04 as well as the tax returns for the subsequent financial years were based on the reported profits stated in the Profit and Loss accounts.  As the government has assessed Shun Yong’s profit on the basis of these accounts, I do not see any good reason to reject the same accounts merely because they are not audited.

62. After having examined Shun Yong’s Profit and Loss accounts, I find that the operating costs after the accident have been increased by, apart from the increase in the cost of materials, additional expenditures on wages of casual labour and sub-contracting charges.  Expenses for either causal labour or sub-contracting are not reflected in the Profit and Loss accounts for the financial years of 2002/03 and 2003/04 prior to the accident. However, after the accident, expenditures in respect of the items of casual labour and sub-contracting charges are shown. 

63. In the circumstances, I find that an increase in the cost of materials and the additional expenses on causal labour and sub-contracting services have all contributed to the drop in profit after the accident.  I further accept that the extra labour costs and sub-contracting charges were incurred as a result of Mr. Chan’s disability.  In any event, on the evidence, I find that in the first year after the accident - in view of the various treatments Mr. Chan had to receive - his earnings would have likely been affected.  Thus, In relation to the second sub-issue, I find that Mr. Chan’s disability has caused Shun Yong’s loss of profit.

64. With these findings, I now assess Mr. Chan’s loss of earnings.

(2i) Pre-trial loss of profit

65. In relation to the pre-trial loss of earnings, Mr. Wong calculated the pre-trial loss on the basis of the difference between the pre-trial net profit for the two accounting years of 2002/03 and 2003/04 and the post-trial profit after the accident.

66. Mr. Wong took the profit of Shun Yong for the two years before the accident as the basis of calculating Shun Yong’s estimated increase of profit after the accident. However, for year 2003/04, Mr. Wong submitted that the net profit should have been $172,655 instead of $160,655 as shown in the account as a result of Mr. Chan’s evidence of an error in the accounting record.  Mr. Wong therefore disregarded a sum of $12,000 for MPF contributions for year 2003/04, and arrived at a figure of 12.3% as the projected increase of profit.

67. In my view the evidence is not entirely clear as to whether the item of MPF expense in the Profit and Loss account for year 2003/04 was an mistake or not.  In the Notice of Tax assessment for year 2003/04, I observe that Shun Yong’s tax assessment was based on the net profit of $160,655 reported in the Profit and Loss account.  Hence, I do not see any reason why I should not take the same figure as shown in the account as the correct amount.  Hence, I would adopt the original reported profit as the basis of calculating Shun Yong’s estimated increase of profit, and the figure is 4.5% ($160,654.90 - $153,692.40 /$153,692.40 x 100%).

68. On the basis of an increase of 4.5%, Shun Yung’s profit subsequent to the accident would have been as follows:

For the year 2004/05:	$160,654.90 x 104.5% = $167,884.4.
For the year 2005/06:	$167,884.4 x 104.5% = $ 175,439.2.
For the year 2006/07:	$175,439.2 x 104.5% = $ 183,334.0.

69. Since the accident, Shun Yong’s profit, according to my finding above, has dropped because of an increase in the cost of materials and expenses for causal labour and sub-contracting charges. However, as the loss of profit was not entirely caused by an increase in the cost of materials after the accident, and it is clearly unrelated to Mr. Chan’s disability, I should, in calculating the loss of profit caused by the disability, take account of the percentage of increase of the cost of materials after the accident, and deduct the estimated net profit accordingly.

70. The percentage of the cost of material to the business receipts for years 2002/03,2003/04 2004/05, 2005/06 and 2006.07, according to Mr. Lim’s calculation, is respectively 16.6%, 18.4%, 36.2%, 43.13% and 43.14%.  Hence prior to the accident, the median figure in relation to the percentage of the costs of material to the business receipts is 17.5%. 

71. Accordingly, after the accident, the cost of materials to the total business receipts for years 2004/05, 2005/06 and 2006/07 has increased by respectively 18.7% (36.2% - 17.5%), 25.6% (43.13% - 17.5%) and 25.64% (43.14% - 17.5%).   The net pre-trial loss of profit due to the disability should therefore be deducted by the corresponding percentages.

72. Thus, the pre-trial loss of earnings is therefore as follows:

For the year 2004/05:	$167,884.4 - $57,804 = $110,080.4.  There should be a deduction of $20,585.0 ($110,080.4 x 18.7%) to reflect the increase by the cost of materials.  Hence the loss of profit due to the disability is  $89,495.4 ($110,080.4 - $20,585.0).
For the year 2005/06:	$175,439.2 - $72,864 = $102,575.2. Similarly, there should be a deduction of 25.6% to account for the increase by the cost of materials. The profit is accordingly reduced by $26,259.3 ($102,575.2 x 25.6%).  The net loss of profit due to the disability is $76,315.9 ($102,575.2- $26,259.3).
For the year 2006/07:	$183,334.0 - $53,405= $129,929. .  Similarly a deduction of 25.64% will further reduce the profit by $33,313.8 ($129,929 x 25.64%).  The net loss of profit due to the disability is $96,615.2 ($129,929 - $33,313.8).

73. As for the period since 1 April 2007 up till trial, I have not been provided with any business accounts. I do not think it is fair to assume the loss will continue at the same rate as the year 2006/07. The fairer assessment, in my view, is to take the median loss of profit of the past three years, which yields a figure of $87,475.5 ($89,495.4 + $76,315.9 + $96,615.2 /3).  Hence a period of 8 and ½ months will generate a sum of $ $61,961.8 ($87,475.5 /12 x 8.5).

74. Hence, the total pre-trial loss is in the sum of $324,388.3 ($89,495.4+ $76,315.9 + $96,615.2 + $61,961.8).  A global deduction of 25% to reflect the pre-existing condition will yield an award of $243,291.2.

(2ii) Post-trial loss of profit

75. For future loss, Mr. Wong adopts the conventional multiplicand/multiplier approach, and further asks for a higher multiplier of 9 on the basis that Mr. Chan’s job is more skill based rather than manual based and that he is free to decide when he wishes to decide.

76. Mr. Lim however contends that it is not suitable to apply the traditional multiplicand/multiplier method on the ground that future loss is extremely difficult to quantify in this case.  He urges me to award a sum of $100,000 to compensate Mr. Chan’s loss of business opportunities as the learned Judge did in the case of Ho Yee Miu v Liu Hon Loong (unrep.) HCPI No. 649 of 1999 (Seagoratt J., 20 July 2000).

77. For the post-trial loss, I do not agree with Mr. Lim that a global sum should be awarded for loss of business opportunities.  Such approach is only suitable for cases such as Ho Yee Mui (ibid) where a court is totally in the dark as to the appropriate earning of a plaintiff. This is not such a case.

78. Mr. Lim in principle agrees that Mr. Chan may still need help from time to time but contends that he can still do a lot of work in the garage.  According to the evidence I have found, it is true that Mr. Chan can still do at lot.  However, with his degenerated back which will likely only worsen his disability with his advancement in age, Mr. Chan would be forced to rely more and more on outside help, in particular in relation to the more strenuous type of work in car repairing and maintenance. In view of the evidence of Mr. Chan’s pre-existing condition, for which I have allowed a deduction of 25%, I am inclined to find that Mr. Chan will in the future continue running his business with reduced efficiency, and hence, with reduced profit.

79. Mr. Chan is now 50.  I reject Mr. Wong’s submission that a higher multiplier should be adopted.  Although he is a self-employed person who can theoretically decide when he wishes to retire, in reality however, Mr. Chan would find it increasingly difficult to manage most of the strenuous work due to the disability.  The disability will in turn reduce the likelihood of him continuing to make profits until the end of the expected period of earnings. Hence, I am of the view that the appropriate multiplier should be 6.  The appropriate multiplicand should be the median figure for the pre-trial loss of profit, which is $87,475.5.  This will yield a figure of $524,853 ($87,475.5.6x 6).

80. Similarly, a 25% deduction should be applied to reflect the pre-existing condition.  Hence the award for future loss of earnings would be $393,640.

(3) Special Damages

81. Mr. Chan claims altogether 16 items of special damages.

Medical Expenses

(a) Out-patient treatment fees at Government hospital ($3,170)

82. The Defendant disputes this sum and suggests an amount of $1,670.  The amount does not appear to be extravagant, I allow this sum in full. 

(b) Private treatment by Dr. Lam Yuk Yee ($27,100)

83. The sum of $27,100 is agreed. 

(c) Private treatment at St. Teresa’s Hospital ($29,103)

84. The Defendant only agrees an amount of $12,397 for the first admission after the accident but disputes liability for the payment of the second hospital admission.  There is no evidence that the second admission in February 2006 is related to the accident.  I will therefore disallow the claim for treatment of the second admission.  Hence, I only award $12,397.

(d) Private treatment by Dr. Yeung To Ling ($3,780)

85. The Defendant agrees a sum of $2,000.  Mr. Chan is unable to prove the necessity of the disputed remaining amount.  Hence, I should only allow $2,000 for this claim.

(e) Private treatment by Dr. Arthur Yau ($700)

86. This is agreed.

(f) Private treatment at Quality Healthcare Physiotherapy ($6,900)

87. The Defendant agrees a sum of $3,300 only on the ground that the amount claimed is excessive.  I note that the treatments Mr. Chan received were for the period up till the end of 2005.  Although Dr. Lee opines that the recovery period would have been about 12 months, I am inclined to be slightly generous with Mr. Chan by allowing him to claim treatment up till the end of 2005 as I note from the surveillance tape that Mr. Chan in November 2005 still appeared to have some slight discomfort when he walked.  I further consider that the treatments during this period are not excessive and allow the claim in full.

(g) Private treatment at California Chiropractic Centre Ltd. ($24,320)

88. This is disputed.  The treatments received are for the period between April 2006 and September 2006, which is about 2 years after the accident.  For the reason given in sub-paragraph (f) above, I am of the view that this treatment is not justified and disallow this claim.

(h) Private treatment at Dr. Ng Siu Kai ($2,850)

89. This is also disputed.  The treatment by Dr. Ng is in respect of Mr. Chan’s hamospermia.  There is no evidence that this condition is related to the accident and I therefore also disallow this claim.

(i) Bonesetter fee ($3,600)

90. This treatment was around November 2005. For the same reason in sub-paragraph (f) above, I would therefore allow this claim.  The amount does not appear to be unreasonable, I would allow the claim in full.

(j) Private treatment at Dr. Jeff Lau & Dr. Siu Tak Wa ($1,240)

91. The Defendant agrees the sum of $1,040 in respect of the fees of Dr. Jeff Lau but disputes the remaining amount of $200 on the ground that the sum is not receipted.  It is not true that the sum of $200 is not receipted.  The receipt appears at hearing bundle D418.  The date of treatment is 13 July 2006.  The receipt however does not state the nature of the treatment.  Given the paucity of evidence in support of this amount, I am not prepared to allow it.

Travel expenses($4,449)

92. Mr. Chan claims a total sum of $4,449 for travel expenses.  The Defendant only agrees the amount of $3,333.  In light of my ruling above for medical expenses, I would therefore disallow $60 for one admission to St. Teresa’s Hospital, $60 for attending Dr. Ng Siu Kai, $588 for attending Chiropractic Centre.  Hence, the total amount I disallow is $708. The amount I award under this head is $3,741 ($4,449-$708).

Tonic Food ($10,000)

93. The claim is not receipted at all.  The Defendant is only prepared to accept $5,000.  In the circumstances, I would only allow $5,000 for this claim.

Costs of purchase of massage chair ($16,800)

94. There is no evidence supporting the reasonableness of this claim.  I will not allow it.

Costs of purchase of mattress ($3,550)

95. I disallow this item of claim for the same reason stated above in respect of the claim for the purchase of the massage chair.

Repair costs and survey and towing fee ($12,950)

96. This sum is agreed, and I will allow it.

Total amount of Special Damages

97. I award a sum of $56,907 for medical expenses, $3,741 for traveling expenses, $5,000 for tonic food and $12,950 for damage to the vehicle, hence a total of $78,598.

Summary of Damages

98. Accordingly the amounts I award in respect of the heads of damages are:

(1)	PSLA	$150,000.00
(2i)	Pre-trial loss of earnings	$243,291.20
(2ii)	Post-trial loss of earnings	$393,640.00
(3)	Special Damages	$78,598.00
	Total:	$865,529.20

Conclusion

99. There will be judgment for the Plaintiff against the Defendant for the sum of  $865,529.20 with interest calculated at the appropriate rates in accordance with the usual principles and a nisi costs order.